Entrepreneurial http://blogs.reuters.com/small-business Grow your own Wed, 30 Oct 2013 14:31:17 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.5 Q&A with Randy Goldberg, co-founder of Bombas Socks http://blogs.reuters.com/small-business/2013/10/30/qa-with-randy-goldberg-co-founder-of-bombas-socks/ http://blogs.reuters.com/small-business/2013/10/30/qa-with-randy-goldberg-co-founder-of-bombas-socks/#comments Wed, 30 Oct 2013 14:31:17 +0000 http://blogs.reuters.com/small-business/?p=6855

REUTERS/Courtesy of Bombas Socks

This week, after successfully raising $140,000 on the crowdfunding site Indiegogo, Bombas Socks shipped the first of their product to customers. Bombas, the Warby Parker or TOMS Shoes of socks, is based on a simple idea: one pair purchased equals one pair donated. In this case, Bombas donates to homeless shelters that are in massive need of socks.

We caught up with Randy Goldberg over email who, along with David Heath, founded Bombas Socks. We asked him about running a successful crowdfunding campaign, bringing a product to market and conscious consumerism.

First off, tell us about how the Bombas idea – one pair purchased for one pair donated – came about? It seems so straightforward, I’m a little shocked no one else had tried it.

The idea for the company came from a quote we saw in 2010. The Salvation Army was doing a massive sock drive on Facebook with Hanes, and they were quoted saying “socks are oftentimes the most requested clothing item at homeless shelters.” That stuck with us. Socks went from an afterthought to something we thought about all the time. We had never thought about the fact that no one donates socks–they just wear through them and throw them out. It’s also rare that someone in need has a chance to change their socks. So we quickly realized the one-for-one model popularized by Tom’s Shoes really made sense for socks.

Do you have any tips or lessons you learned about running a crowdfunding campaign? Especially with Indiegogo? Did your plan (incentives, etc.) going into it change over time as donations came in?

I think we were able to raise over $140,000 because we treated the campaign like the beginning of a business, not just a one time campaign. Customer service is at the center of our company, and it was a big part of the campaign from the beginning. We responded to every comment and inquiry on Indiegogo, and we created new ways to keep our supporters and early evangelists involved on a week by week basis. We waited to launch the campaign until we felt we had our voice and story fine tuned. And then we kept things interesting by adding new goals, images, art, and mini campaigns along the way. For us, the key was keeping the energy up, attention to detail, and the support we got from our friends, Indiegogo, and our early supporters.

Did the campaign meet your expectations?

The campaign exceeded our expectations. Beyond raising money, we were able to connect to our customers directly, learn what they responded well to in our messaging, art, and overall vibe, and prepare for the launch of our ecommerce site. The Indiegogo audience was the perfect place to introduce Bombas to the world.

Tell us about the organization you partnered with to donate socks. Was it hard to find them?

Hannah’s Socks’ sole mission is to distribute socks to those in need throughout the U.S. We found Hannah’s and immediately liked their approach, attitude and that they were a U.S.-based charity. We wanted to really focus on solving a problem in our own country.  For every pair of Bombas we sell, we’ll be donating a pair to someone in need. Hannah’s has a goal of handing out 225,000 pairs of socks this year, and we’ve already committed to donating over 30,000 pairs of socks based on our early support on Indiegogo and BombasSocks.com. We want to help solve this issue.

How long from idea to inception? Tell us about the design/prototype process?

Two years from idea to launch. Getting the product right was everything for us. We knew we couldn’t just make another bland tube sock. Our technical advisor is the former president of Gold Toe Socks. He helped us re-engineer the sock from the toe seam up, find an ethical factory partner with real fit-tech chops, and create what we’re calling athletic leisure socks. They’re built for athletes–made with pima cotton, soft but not thick, warm in the winter, cool in the summer, and they wick moisture naturally. And on the design side, we realized socks haven’t changed much in the last 30 years while athletic shoes have gone crazy in a good way. Bombas are bright, fun, and look good with your flyknits. We’re a bit obsessed with our own socks…

Any lessons for other entrepreneurs on, say, sourcing materials? Finding a factory? Fulfillment, etc?

I think the biggest lesson is that there’s not really room for compromise if you believe in your product. We wanted to make an athletic sock that felt like it cost upwards of twenty dollars, we wanted to give away a pair of socks for every pair we produced, and we wanted to keep the price under ten dollars. So we had to look at dozens of factories to find the right fit. We had to talk to multiple fulfillment partners. We had to test over and over again. It took a lot of R&D, a few left turns, and some tough decisions, but we’re proud of the end product.

Finally, what’s next for Bombas? Will we see Bombas in stores?

Total sock domination… Haha. Right now we’re focused on building the brand, selling our calf and ankle socks on BombasSocks.com, working with our charity partners, and concepting new designs. Bombas are in one store and one store only right now: BombasSocks.com. But that may change in the future…

 Image courtesy of Bombas Socks. 
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Q & A with Joel Jackson, founder of Mobius Motors http://blogs.reuters.com/small-business/2013/05/23/q-a-with-joel-jackson-founder-of-mobius-motors/ http://blogs.reuters.com/small-business/2013/05/23/q-a-with-joel-jackson-founder-of-mobius-motors/#comments Thu, 23 May 2013 14:39:18 +0000 http://blogs.reuters.com/small-business/?p=6835 In February, Global Post profiled an interesting startup in Africa called Mobius Motors that is working to manufacture affordable ($6,000) cars designed specifically for Africans.

By simplifying the designs through the elimination of non-essential parts like power steering and air conditioning, the team at Mobius is able to drastically reduce the cost of the vehicle, which they hope will help small business owners in need of affordable transportation. Reuters reached Mobius founder and CEO Joel Jackson over email to ask him about his plans for the car company and some of the challenges he foresees.

Reuters: First can you tell me briefly how Mobius came about? I understand you were working in Africa when you had the idea?

J.J.: Mobius was inspired by my experience working in rural Kenya in 2009 with a startup forestry venture. In this role I spent time with local farming communities and learned about some of their day-to-day challenges. One of the biggest issues these communities faced was immobility. Without access to appropriate forms of transport many people would walk tens of kilometers to get around – to get access to schools, or doctors, or clean drinking water or farming inputs.

The vision of Mobius is to build a more appropriate and affordable vehicle for transport businesses and in turn create a platform for mobility across Africa.

Reuters: Can you give us some info about the company? Number of employees, how many cars you currently build/hope to build? Any info on financials? 

J.J.: Mobius has 24 employees. We’ve built two prototype vehicles and one production alpha vehicle; and we’re launching initial proof-of-concept production of 50 vehicles in Q3 2013. To date, Mobius has raised several million dollars of investment and we plan to increase production to 300 units in mid 2014.

Reuters: How do you manage to keep costs down and actually build a car that sells for $6,000? Are parts imported? How much of the car is made in Africa?

J.J.: Mobius reimagines the car, eliminating all non-essential features to drive down cost and weight. For example, we remove air conditioning, power steering, many internal fixtures and even glass windows. At the same time we invest in key aspects of functionality that matter, such as suspension and handling, for reliable performance on highly degraded road environments. We have partnered with a major European carmaker for powertrain supply along with several other strategic suppliers internationally for safety-critical systems in the vehicle. Currently, over 35% of the vehicle cost is sourced domestically within Kenya. Longer term, we’re working with Kenyan suppliers to increase local content beyond 40%.

By locally sourcing more supplies and expanding our assembly capabilities in Kenya, we plan to not only drive down the cost of the car but also help strengthen a domestic automobile industry and create thousands more skilled jobs.

Reuters: What are the main challenges that Mobius faces? What challenges do you foresee?

J.J.: Our main challenge to date was finding strategic automotive suppliers aligned to our currently modest production volume targets. This issue will diminish as our production volumes significantly increase over the coming years, but initially we found it difficult to access visionary suppliers who can supply us with the components we need at much lower order volumes than the industry standard of more established automotive OEMs.

Reuters: Can you discuss the goals of Mobius? Obviously profit is key, but you also aim to help entrepreneurs and have some social impact. How do you square all this?

J.J.: Our vision is to empower entrepreneurs across Africa by building a platform for mobility, with better cars, business-in-a-box advice and access to financing.

Entrepreneurs need durable, functional, and affordable cars to support a range of transport businesses, such as mobile medical care, goods delivery, public transport and school bus routes. Thus, from the ground up, we’ve designed a car optimized for rugged roads, with large versatile loading space, efficient fuel consumption and easy maintenance. All at an affordable price of $6,000.

Mobius Two is designed to support existing small businesses and encourage new entrepreneurs to invest in transport opportunities. Our goal this year is to launch initial production and sell our cars to these entrepreneurs; to begin unlocking the opportunity that viable transport businesses create for the entrepreneurs who run them and end-users in communities who use them.

As we expand our production capacity, prove our business model to entrepreneurs and sell more vehicles we will strengthen our social impact on the small business community. Long term, we believe that mass production of Mobius vehicles will catalyze systemic change in Africa’s transit network and enable a prosperous future for hundreds of millions of people across the continent.

Reuters: Do you envision a time when the Mobius is exported to other countries? Can you describe your growth projections?

J.J.: Yes, we have plans for regional expansion.

The next two years will be focused on the validation of Mobius Two in the Kenyan market. We aim to prove our business model, centralize production and build an efficient distribution network all within Kenya. During this time we will test our production operation and distribution channels to identify any unforeseen issues as we optimize our model.

By 2015, we plan to launch a next-generation Mobius Three vehicle with a distribution network stretching across Kenya. In 2016 we plan to roll out vehicles to neighboring countries in East Africa. As we build our facilities to reach increasing production automation, our goal is to eventually expand pan-Africa.

Image: Courtesy of Mobius Motors. REUTERS

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Q&A with cyber crime expert Tim Francis http://blogs.reuters.com/small-business/2013/05/03/qa-with-cyber-crime-expert-tim-francis/ http://blogs.reuters.com/small-business/2013/05/03/qa-with-cyber-crime-expert-tim-francis/#comments Fri, 03 May 2013 18:10:22 +0000 http://blogs.reuters.com/small-business/?p=6829 Timothy C. Francis is Second Vice President for Travelers Bond & Financial Products in Hartford, CT. Francis leads Travelers’ Business Insurance Management and Professional Liability initiatives and serves as Enterprise lead for Cyber Insurance. Reuters spoke with him about what small businesses need to know about cyber crime. 

Small business owners hear a lot about the dangers of cyber crime and how they should fear it, but what exactly should they be afraid of? What are some examples of how small businesses can be affected by cyber crime?

To put it simply, small business owners should be concerned about the potential for loss and exposure of confidential data, commonly known as a data breach, as a result of a cyber attack. Confidential data can pertain to customers, employees and the business and typically includes items like company account records, contact and address information, purchasing history, credit card and Social Security numbers and medical data.

Data breaches can have serious consequences for the person whose data is breached, as well as the company that collects and holds that data. Nearly all 50 states have laws governing notification if/when a customer’s data is breached, and notification can be costly. Actual costs will vary depending on how many records are involved, but generally speaking it costs about $200 total per record. This total amount combines the actual cost of investigating and alleviating the situation, potential liability and potential loss of future business to competitors.
Why are small businesses often more likely to be victimized than larger businesses? Is it simply a lack of resources devoted to cyber security?

A small business’s lack of resources is certainly part of the problem. While a large corporation may be able to invest heavily in sophisticated security strategies, with 25-person IT teams to ensure that every office computer is protected, small businesses simply do not have the money or the manpower. This unfortunately leaves a small business not only vulnerable to an attack, but also allows crimes to continue unchecked until they’re detected or exposed – at which time the losses can already be significant.

In addition, small businesses are sometimes used as a stepping stone for cybercriminals. Because small businesses often have contracts with large businesses, they can be targeted as an access point to the larger organization.

Verizon and Symantec have both recently released reports detailing findings about cyber security and small business. What are some of the main points that small businesses should be aware of?

Small business should be aware not only of the increasing pervasiveness of cybercrime, but also the most common types of cyber attacks that are taking place. For example, cybersecurity firm Symantec recently released a study noting that half of all targeted attacks in 2012 hit companies with fewer than 2,500 employees, and overall, targeted cyber attacks jumped 42 percent in 2012. Of that 42 percent, nearly one-third (31 percent) were aimed at businesses with fewer than 250 people, up from 18 percent the prior year.

In terms of attack methods, Verizon’s 2013 Data Breach Investigations Report (DBIR) report revealed that hacking was the number one way breaches occurred and was a factor in 52 percent of data breaches. Common network intrusion methods included: weak or stolen credentials, such as a user name/password; malware use, such as malicious software, script or code; physical attacks, such as ATM skimming; and social tactics, such as phishing.

What kind of small businesses are especially vulnerable?

Retailers are targeted more by cyber criminals than others. To be competitive in the marketplace today most retailers have to reach customers through various channels and online portals, including websites, social media and blogs, among others. Many are also trying to gather information about their customers and potential customers. This creates a huge opportunity for cybercriminals who have many ways to access confidential business and customer information.

It’s important to note, however, that it’s not just the online businesses or brick-and-mortar stores that face threats to cyber attacks – any small business with a credit card machine, computer or tablet device is at risk. For example, each customer’s swipe of a credit card in a store provides data that is attractive to people who want to commit identity fraud.

The Verizon report breaks down the attackers into three categories — activists, criminals and spies. Can you elaborate on these groups and their motives?

For activists, their aim is to maximize disruption and embarrass victims. The methods used are quite basic and are more opportunistic in that they are not targeted at a specific individual or company.

For criminals, their actions are motivated by financial gain. They are more sophisticated and calculated in how they select targets, often using more complex hacking techniques than activists.

For spies, actions are often state-sponsored and a form of espionage. These types of incidents have received heightened media attention, in part because of the sophisticated tools spies use to commit the most targeted attacks. The motivations and goals behind specific attacks include obtaining intellectual property, financial data or insider information.

What are some basic things small businesses can do to avoid being attacked?

When it comes to cybercrime, the best offense is a good defense. As cyber risks continue to arise through new technologies, it is important to have the right protections in place before an incident occurs. For small business owners, this includes working with their insurance agent and broker to make sure all exposures that can be managed are covered and that employees are exhibiting behaviors that limit cyber risks.

Specific risk management strategies include: 1) Training employees to protect sensitive information, 2) Ensuring systems have appropriate firewall and antivirus technology and that security software patches are updated in a timely fashion, 3) Monitoring use of mobile devices and public Wi-Fi access for employees, and 4) Having a plan in place to manage a cyber event if one takes place – sort of like a fire drill.

Social media sites like Twitter and Facebook have been great tools for small businesses to help in marketing etc. Are they also creating openings for cyber criminals to attack companies?

Social media sites like Twitter and Facebook are being used more and more by small businesses to increase awareness of their business and its products/services. While they are often safe for marketing purposes, these social utilities should be used with the same caution and strategic risk management that applies to a small business’s website or other technological devices.

If, for example, a cyber criminal gains access to a small business’s Twitter handle or Facebook account, the business is at risk of dealing with reputational issues by customers. As we have seen with the AP’s most recent Twitter hack (an “activist” method), the effect of a cyber attack can create a visceral negative reaction among the public, so it’s important to have quick action plans in place to deal with an attack if/when it occurs.

Cyber crime isn’t going away. What are the areas you see that are of increased concern? Is mobile a growing exposure?

Mobile – and the increased use of Wi-Fi on mobile devices – presents particular cyber risks for small businesses because they are vulnerable to loss and/or theft. As businesses increasingly offer opportunities for employees and clients to access their services from a mobile device, the cyber risk in the event a device is lost or stolen also grows. Considering that hackers added malicious code to 58 Android apps, infecting 250,000 phones earlier this year, cyber risk is a serious threat.

In addition to business apps, people almost always add personal apps to their devices. In a world filled with this type of mobile technology, it is more important than ever that small businesses manage associated risks by making sure their employees’ devices have safeguards, such as password protection and tracking capabilities, so they can be located if they’re lost or stolen. It is also important to monitor whether the apps being downloaded on their mobile devices are malware and virus free.

The bottom line for small businesses is this: Hackers are getting more sophisticated every day, sometimes forming syndicates of like-minded criminals to share information and new techniques. Small businesses are increasingly in their crosshairs and they need to use every protection available to fight the growing cyber threat.


Image: A man types on a computer keyboard in Warsaw in this February 28, 2013 illustration file picture. One of the largest ever cyber attacks is slowing global internet services after an organisation blocking “spam” content became a target, with some experts saying the disruption could get worse. To match INTERNET-ATTACK/ REUTERS/Kacper Pempel/Files

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The bazaar, the oldest newest idea for small businesses http://blogs.reuters.com/small-business/2013/02/25/the-bazaar-the-oldest-newest-idea-for-small-businesses/ http://blogs.reuters.com/small-business/2013/02/25/the-bazaar-the-oldest-newest-idea-for-small-businesses/#comments Mon, 25 Feb 2013 17:50:31 +0000 http://blogs.reuters.com/small-business/?p=6810 In an FT column today Dave Eggers pines for the days when schools taught metal and woodworking. “It doesn’t all have to be keyboards and screens, does it?” he asks.

It certainly doesn’t.

Many small business in the U.S. are  becoming part of a new wave of small-scale and super premium manufacturing. There’s any number of examples to look at, like the plumbing parts manufacturing in Brooklyn, the artisanal chocolate makers and the distillers in Boston.

There’s also no shortage of stories focusing on Brooklyn’s manufacturing boom. Turns out we are making things with our hands even if schools don’t teach us how anymore.

Of course Brooklyn, with its close proximity to Manhattan and available factory space, can’t be a model for every city that wants to develop a micro-manufacturing center specializing in pickles, bicycles and chocolate.

But there’s an old idea that Eggers touches on that’s taking hold in New York that other cities can and should appropriate. And it’s such an old concept that Brooklyn can’t even take credit for it. It’s the bazaar, as old as market capitalism itself.

In New York City, we’ve seen a few bazaars sprout up in the last few years. Of course here they’re called “fleas” because this has a retro feel to it and sounds cooler than simply calling something a “market.” But make no mistake, these are nothing new. They are just updated variations of the old mall/market/bazaar.

There’s my favorite, the Pop Up Flea, which returned this year bigger than ever and boasting a Microsoft sponsorship. And then there’s the mother of fleas, the Brooklyn Flea, an outdoor flea that seeks shelter in the old Williamsburg Bank building during colder months to attract consumers all year. It’s also grown a spinoff market for food vendors called Smorgasburg. And if there’s doubt about growth potential for these markets, consider one investor the Brooklyn Flea’s founders recently attracted: Goldman Sachs.

Goldman invested $25 million dollars to help the Brooklyn Flea build out a communal cooking space for food startups, as the New York Times reported. That’s not the only food incubator in town either. Somewhat shockingly to Eggers, people have embraced his idea to build a communal market space for small business and manufacturers:

Every time I pitched it, I half-hoped someone would tell me it was a terrible or unworkable idea, because I have none of the concrete expertise – in small manufacturing, real estate, renovating former mints – necessary to make it happen. But so far, no one’s told me what I wanted to hear. Instead, too many people have said yes.

Eggers may prefer to think of himself as a writer and not an entrepreneur. But as the founder of a small but respected publishing empire, he shouldn’t be so surprised by those “yeses.”  Here’s to Egger’s entrepreneurial instinct and to the old concept of the market, or the bazaar, or the flea…whatever you want to call it.


Image: A shop vendor waits for customers in Grand Bazaar of Istanbul March 3, 2010. REUTERS/Murad Sezer

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Boxee CEO on the future of TV: Aereo, Cloud DVRs, Netflix and Apple TV, oh my. http://blogs.reuters.com/mediafile/2013/02/25/boxee-ceo-on-the-future-of-tv-aereo-cloud-dvrs-netflix-and-apple-tv-oh-my/ http://blogs.reuters.com/mediafile/2013/02/25/boxee-ceo-on-the-future-of-tv-aereo-cloud-dvrs-netflix-and-apple-tv-oh-my/#comments Mon, 25 Feb 2013 21:49:09 +0000 http://blogs.reuters.com/mediafile/?p=36325 Boxee CEO Avner Ronen recently sat down with me for a wide-ranging video interview on the state of television, and its future. His company just released a $99 device that uses the Amazon cloud to give its users an infinitely-sized DVR. If it takes off, the Boxee TV could fundamentally change the way cable customers consume content -- and the way they pay for it. Users will also be able to watch their recordings from devices like the iPad. Can Boxee play nice with an industry it's trying to disrupt? Ronen says yes. But between the Aereo lawsuit and the Apple TV rumor-mill, it's a crowded, competitive landscape. So, can the company keep competing with the next generation of startups that have the television industry in their targets? Please watch, and find out:

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How smart businesses are winning in emerging markets http://blogs.reuters.com/great-debate/2013/02/22/how-smart-businesses-are-winning-in-emerging-markets/ http://blogs.reuters.com/great-debate/2013/02/22/how-smart-businesses-are-winning-in-emerging-markets/#comments Fri, 22 Feb 2013 16:45:06 +0000 http://blogs.reuters.com/great-debate/?p=18208 As companies in mature markets compensate for modest growth at home by trying to boost their presence in emerging economies, they are encountering intense competition from increasingly confident local players. Aggressive and nimble enterprises in China, India and elsewhere may pose some threat, but the real challenge in these high-growth markets is more complex. And it is affecting companies from all markets, not just those in North America, Europe and other developed economies.

The important transformation in the global landscape is not so much the shift to emerging economies but the extraordinary growth in business activity among emerging market countries. When American companies target Brazil or India, for example, they should know that China has displaced the United States as the largest trading partner of both. We at Accenture predict that trade between emerging economies is about to overtake that between developed economies.

Thus, companies need to tackle the diversity of growth opportunities and the pace of change if they are to succeed. Clearly, emerging market companies have some advantages at home. They have established relationships and the ability to leverage scale advantages with low costs and, in some cases, government support. They have faced similar challenges in their home countries, such as dealing with infrastructure deficits and scarce or unreliable data. They are increasingly doing business with one another, growing across one another’s borders and gaining insights and experience on how to best serve one another’s markets. This gives them an inherent advantage over competitors from mature economies unfamiliar with operating in such conditions.

As these companies expand beyond their borders, the competitive picture becomes more balanced. The evidence suggests that business leaders – no matter whether they are from mature or emerging markets ‑ are not confident of achieving success. According to Accenture research on almost 600 senior executives from multinational companies around the world, 40 percent said they lack a strategy or the operational capabilities to grasp opportunities in these markets. More than half said they need to fundamentally rethink their strategies to compete in them.

What are the best ways to tackle emerging markets?

Rather than prioritizing traditional target markets, such as neighboring countries or countries with a common language, progressive companies identify consumer segments in particular cities or customer segments that may straddle national borders. For example, Procter & Gamble identified the needs of male consumers in areas with scarce water supplies and designed grooming products for this group in multiple markets. Within three months of launch, one shaving product became the best-selling product of its kind in India.

Local relevance is also critical, and some companies are pushing this to new levels. Haier tailors its products to local markets; in China’s rural Sichuan province, it sells washing machines designed and labeled to wash “clothes, sweet potatoes and peanuts.” In Brazil, Coca-Cola has used social media to better understand consumer preferences and has developed a successful local network to supply traditional Coca-Cola products as well as fruit juices tailored to local tastes.

Innovative distribution models have also been used by some to incorporate consumers into the supply chain. Peruvian soft-drink manufacturer AJE found success by mobilizing local micro-entrepreneurs who use their own transportation to reach untapped consumers in remote areas.

One starting point for these and similar strategies is sophisticated market intelligence. For example, analysis of projected demand for specific products and services in multiple target locations can help determine which groups to target and when. Companies will have to invest in analytics capabilities to maximize the value of existing proprietary customer data where market data is scarce. Powerful new mobile and social media tools can help improve the collection of reliable local data and insights direct from consumers. For example, Mexican retailer Grupo Elektra used detailed customer data to diversify into financial services and built a large network of bank branches to complement its retail chain.

The precision with which multinationals must assess customer segments will also need to extend to identifying geographic markets. Many continue to focus on the BRICS (Brazil, Russia, India, China and South Africa) and a few other economies. But the emerging-market growth story extends to pockets all across the globe, and offers a premium to fast movers. Accenture analysis shows that Kazakhstan will have more households earning at least $50,000 in 2020 than Indonesia, the Philippines, Vietnam, Pakistan and Egypt put together. And by that time, Turkey may see one of the greatest absolute increases in income for $50,000-plus households of any emerging economy.

For many U.S. companies, with uncertainty as great as it is, there’s a temptation to wait before exploiting these growth opportunities. But hesitation may be the worst option as nimble competitors snap up acquisitions and narrow the windows of opportunity. Funds, knowledge and foresight are not lacking: Excluding financial services organizations, U.S companies had $1.74 trillion of cash and other liquid reserves in December 2012. U.S. companies need to build the confidence to develop the appropriate skills and capabilities, and to strike while the iron is hot.

PHOTO: Brazilian Indian Chief Raoni drinks a soft drink before a protest at the Esplanada dos Ministerios in Brasilia May 7, 2009. REUTERS/Roberto Jayme

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Love at first byte: Tech co-founders meet through dating sites http://blogs.reuters.com/small-business/2013/02/14/love-at-first-byte-tech-co-founders-meet-through-dating-sites/ http://blogs.reuters.com/small-business/2013/02/14/love-at-first-byte-tech-co-founders-meet-through-dating-sites/#comments Thu, 14 Feb 2013 22:10:24 +0000 http://blogs.reuters.com/small-business/?p=6799






Gina Lujan did not meet her Hacker Lab co-founders the usual way. They were not
childhood friends. They did not launch their business from their Harvard dorm
room, or at incubators like Y Combinator or TechStars.

Lujan first met Charles Blas and Eric Ullrich after they responded to her personal ad
on Craigslist that read: “seeking all hackers and enthusiasts – where are you?”

“I got a few weird responses,” admitted Lujan, but she also hooked up with Blas, a
hacker who works for a local security company. “It was like founder at first site. The
minute we met each other we said let’s do this.”

Last year the trio launched Sacramento-based Hacker Lab, a tech co-working space
that doubles as a start-up incubator. Lujan had been running a similar co-working
business in nearby Berkeley, but was forced to leave when her landlord’s rental
property was foreclosed on.

The 10,000 square foot facility has a dozen offices, which Hacker Lab rents out for
$500 a month. They also offer desk space, mostly used by students, for $45 to $100 a
month. In addition, they host weekly tech events such as meet-ups, hackathons and
educational seminars that regularly draw 50 or more people.

“We support tech startups and people who want to learn about technology,
specifically in coding and robotics,” said Lujan, noting they are currently adding
about 20 new people every month.

This week marks Hacker Lab’s one-year anniversary and the company is marking
the occasion with a large gathering of Sacramento’s most prominent technorati. As
part of the festivities, Lujan will host a founder-dating event to assist entrepreneurs
to find like-minded people with the hope of starting a company.

“It’s in honor of Valentine’s Day so we tied in the founder dating,” she said. “It’s
really weird how my last year has happened. It’s been very serendipitous.”

Founder dating is a trend that has sprung up since the advent of social media, as
entrepreneurs have used the technology to connect and launch startups.

Chicago-native Sue Khim used dating service OKCupid to meet AllTuition co-founder
Sam Solomon before launching their student-loan assistance service in 2010. Khim
also managed to snare OKCupid owner Sam Yagan as an early investor.

The business of matching founders has since become a cottage industry, with
several sites devoted to helping entrepreneurs find their soul mates.

Jessica Alter, a Harvard business school graduate, launched the aptly named
FounderDating network last January, because social media sites like LinkedIn were
inadequate when it came to pairing up co-founders.

Alter observed that entrepreneurs tend to focus more on finding funding rather
than the right partners and that it should be the other way around.

“They see it as the last thing they need, when it should be one of the first things they
do,” said Alter, who started the business as a side project while she was working as a
community manager for social network Bebo, which was acquired by AOL in 2008.

Alter’s service, geared to technology entrepreneurs, charges a one-time fee of $60
and is invite-only. It works like an eHarmony for business, screening applicants, half
of which are engineers, who must fill out a lengthy questionnaire.

“People don’t ask the tough questions or don’t think enough about the personality-
side of things,” she added. “It’s probably the most debilitating problem for
entrepreneurs today.”

Based in the tech hotbed of San Francisco, FounderDating is now active in 18 cities
across North America and its membership includes former founders from Zynga,
Gilt, Box and Udemy.

Lujan, 41, started her own entrepreneurial career at 16 after she had the first of her
six children and sees it as her mission to help other entrepreneurs.

“I had five kids by the time I was 22 years old,” confessed Lujan, who dropped out
at the age of 14 to raise her daughter, who is almost 25. “My kid’s father said: ‘You
don’t have an education, you’re a minority and you have a kid now, so the only thing
you can do is to work for yourself.’”

Lujan, a second generation Mexican, first caught the entrepreneurial bug growing up
in East Los Angeles, where her father ran a successful construction business. “They
paved most of Los Angeles.”

After her sixth child was born in 1998, Lujan taught herself how to code web
pages and opened her own graphic design firm in Oakland. She also dabbled in the
mortgage business, but had the foresight to get out just before the real estate crash
in 2007.

“I just kind of looked at my life and said: ‘what am I doing? This isn’t me. I make a
lot of money, but I am miserable and my kids are spoiled,’” said Lujan, who during
that time got divorced from her first husband (she remarried in 2009). “I basically
started my life over.”

Lujan believes that experience has helped her connect with people and has been
approached to reproduce Hacker Lab’s success in tech hubs around Sacramento.

“I had no idea that I had this thing for building communities,” she said. “What we do
on a grassroots level is what is missing from a lot of cities that are trying to spark
innovation and create a tech ecosystem.”


Image: Hacker Lab co-founder Gina Lujan. Courtesy of Gina Lujan REUTERS/Handout 

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Blogonomics, Maria Popova edition http://blogs.reuters.com/felix-salmon/2013/02/13/blogonomics-maria-popova-edition/ http://blogs.reuters.com/felix-salmon/2013/02/13/blogonomics-maria-popova-edition/#comments Thu, 14 Feb 2013 00:23:37 +0000 https://blogs.reuters.com/felix-salmon/?p=20538 Popova provides a valuable service to the web, and she also seems to have worked out a highly-successful business model.

Back in May, Kickstarter looked as though it was moving upmarket. Following Bob Lefsetz's lead, I said that "while Kickstarter was originally embraced by the undiscovered and impecunious, its greatest potential, in the music industry, is actually with established acts who already have a large following".

I said that in the first days of the now-famous Amanda Palmer Kickstarter campaign -- something which not only massively exceeded its target, but which also got Palmer a key slot on the TED 2013 roster. But there have been few established music-industry acts following in Palmer's footsteps. Indeed, when Björk recently tried something similar, she quickly discovered that she was never going to get anywhere near her £375,000 goal, and pulled the plug. There were various reasons why the Björk project failed, but one of them was undoubtedly the fact that Björk is a rich person and therefore doesn't "need" £375,000.

It's entirely natural to want to funnel money where the need is greatest. Andrew Sullivan's readers are supporting him, for instance, because they know that the the only source of income keeping his blog going. And Maria Popova's readers are also reportedly quite generous. Anne-Marie Slaughter, for instance, is on the record as giving $25 per month -- that's $300 per year -- to Popova, saying that doing so is “a lot like giving to your public radio station".

Popova doesn't claim poverty. But she does have a tip jar, prompting her readers to give between $7 and $25 per month (that's a lower bound of $84 per year, well above the cost of, say, the New Yorker). And she explains on every page that "Donating = Loving", and that "bringing you (ad-free) Brain Pickings takes hundreds of hours each month". The tip jar is more explicit, saying that "Brain Pickings remains ad-free and takes 450+ hours a month to curate and edit", and Popova has said in the past (although not recently) that Brain Pickings is "not for profit".

The messaging here is clear: I work hard, I put all my time into this, and I have no other source of income, so please give generously to support what I do. And Popova does work hard. But she also has another job, editing Explore, and it's hard to see how she can spend 450 hours a month on any job and still have time left over for that. More importantly, while Brain Pickings might technically be ad-free, it also provides a substantial income to Popova before she gets any money at all from donations.

The secret is affiliate links: if you follow a link from Brain Pickings to Amazon.com, then a big chunk of any money you end up spending on Amazon that session is going to make its way back to Popova. Affiliate links can be very lucrative: the Wirecutter, for instance, makes $50,000 per month, with that number "doubling every quarter", according to David Carr; it gets that money from a readership of less than 350,000 unique visitors per month.

Brain Pickings claims 1.2 million readers, and while they surely don't buy as much stuff on Amazon as the Wirecutter's readers do, even if they only spend one fifth as much, that would still work out to an income to Popova of more than $400,000 per year from Amazon alone. An anonymous blogger on Tumblr (update: he has now named himself as Tom Bleymaier) has done the math a couple of different ways: one comes out to $432,000 per year, and the other comes in at $240,000 per year. However you estimate it, Popova's Amazon income would seem to be more than enough to keep her blogging even if all her tip-jar income dried up entirely.

The blogger, who will say only that his name is Tom and that he Bleymaier, who runs a startup in Palo Alto, is not offended by Popova's income: rather, he's offended by the way in which Popova is being deliberately opaque about what she's doing. Affiliate links are a form of advertising, which does somewhat put the lie to Popova's claims of being ad-free. And as Tom says, if you're making hundreds of thousands of dollars a year from such things, that gives authors a pretty strong incentive to "to change their tone such that they convince the reader to go all the way through with the purchase" of the book (or whatever) that they're writing about.

What's more, the affiliate links don't end at Popova's website: she links to Fab sales from her Twitter feed as well (here, for instance), and gets a percentage of all those revenues too. With more than 300,000 followers on Twitter, a 0.1% conversion rate means 300 sales, and potentially thousands of dollars of income from just one tweet. On top of that, as recently as a couple of months ago, Popova was found to be behind skeevy SEO sites like curesleepapnea.com, gastricbypassrisk.com, and liposuctionrisksinfo.com.

All of which makes the tip jar on Brain Pickings seem less like an honest request for readers to help keep the site going, and much more a cynical attempt to maximize income from a business which is already extremely lucrative. Andrew Sullivan is being very open about how much money he's making, and where it's coming from; Popova, by contrast, is being very opaque.

That's sad, because Popova provides a valuable service to the web, and she also seems to have worked out a highly-successful business model. We should be celebrating the kind of money that Popova is making -- I certainly don't begrudge it -- rather than seeing her try very hard to make it seem that she's less successful than she is. If Popova is up there with John Gruber as a one-person operation making half a million dollars a year from blogging, and if she's managed to get to that position by the age of 28, that achievement is just as impressive as Brain Pickings itself. The problem, of course, is that if she's outed as a member of the 1%, her donation income might dry up quite quickly, and she doesn't want that. Does she ever wonder, though, whether her readers might need that tip-jar money more than she does?

Update: Popova, who says there are "lots of factual errors" in this piece, has responded at length, via email. Here's the whole thing.

Hey Felix,

A few thoughts on the whole Amazon situation.

Tom Bleymeier emailed me about a year ago with some seemingly polite but decidedly passive-aggressive questions about the affiliate links. I wrote him back and answered as patiently, honestly, and completely as I could, over a series of several exchanges. (I'll forward you those in a second if I can dig them out – there's nothing to hide, but I was very miffed by his complete lack of basic journalistic hygiene in making out-of-context quotes from private emails, which are by default always off the record, public.)

At some point, however, I had to disengage – in part because it was becoming enormously time-consuming, but mostly because it became painfully clear that this was a person who had projected his villain image onto me and had absolutely no interest in understanding my motives, my reality, who I am, or why I get up in the morning.

Regarding his Tumblr article – first of all, those numbers are ludicrous! If Amazon gave me even a tenth of that a year after Uncle Sam takes his fair share, I'd be delighted. Delighted!

A biographical note for context – I've spent most of my life in what constitutes poverty by American standards. When I came to America for college, I worked up to four jobs at a time to pay my way through, and graduated with student debt. Not much changed until 2010. When I moved to New York late that year, the security deposit my landlord required (in a non-fancy part of Brooklyn) was more than all my scattered savings combined – $80 more, to be precise. So I went to an ATM across the street, took $80 out of my credit card, deposited it into my checking account, and handed the whole big check to the landlord. While I've come a long way since the end of 2010, and I'm proud and relieved to report that for the first time in my life I'm not perpetually broke, to peg me as a member of the 1% – "outed" as one – is not only absolutely ludicrous but also quite hurtful.

Semi-relatedly, on motives: Brain Pickings is a record of what I, the subjective person, care about, what excites and inspires and stimulates me. A lot of that happens to be books, because I spend the majority of my life reading books, but I would do that anyway, whether 5 or 500,000 people shared in it. And I would do it whether those people clicked the Amazon link or the public library link I provide for each book I write about. (A fact, oddly, never made mention of – I suppose that would discredit the depiction of me as some dollar-sign-eyed monster trying to mercilessly "sell" people books...) I don't mean to be passive-aggressive myself, I'm just having a very hard time with such depictions that run so counter to who I know I am.

Regarding the incorporation – that happened last spring, after a few readers alerted me that a company in Israel had incorporated under the name Brainpickin', by someone named Ariel something-or-other per WHOIS, and was even using my old logotype. My studiomate Tina, who runs the Swiss Miss blog and had dealt with such issues, advised me to incorporate immediately and put me in touch with her IP lawyer, Jerald Tennenbaum. He said an LLC would be best and fastest for trademark purposes, filed the paperwork, billed me, I got a couple of official-looking envelopes from the government, and that was the end of it. I hadn't even thought of it since, until this week's quasi-scandal. If you'd like to reach out to Jerald to confirm, I'm happy to connect you.

Regarding transparency and comparisons to Andrew: I love Andrew, read him daily, and supported his indie move the first day he announced it. But Andrew and I have very different styles. He writes about his partner. I don't. He writes about his health. I don't. He writes about his financials and other meta-topics. I don't. Please understand this is out of an impulse of being "opaque" about it – it simply isn't the kind of writing I do. I've been completely honest about the Amazon links with anyone who's ever asked – and have many, many, many emails I'm happy to forward – and have brought it up myself multiple times in talks and on Twitter.

There are many things I don't write about simply because I don't think they're relevant to readers, but gladly disclose them when asked. For example, I don't tell people how much it costs to actually run the site – which, when you add up web hosting, email newsletter delivery, the money I spend on books, TypeKit, VaultPress, proofreader, developer, designer, and various data plans, adds up to about $3,600 a month. That doesn't include my hours which, if paid at minimum working wage – so if I were cleaning toilets instead of, say, poring through Edison's diaries – would bring the total up to about $7,000 a month.

I also don't mention that I send a good chunk of the donations and such I receive to other things I want to support – sites like It's Okay To Be Smart and Ed Yong's science blog (until he discontinued the donations a few weeks ago), Radiolab, The New York Public Library, A Room of Her Own (a foundation supporting women writers), and various KickStarter projects in the science/history/storytelling space. I don't write about this partly because it's my own business and thus irrelevant to readers, and partly because it's simply cheesy to brag about altruism.

Regarding hours, actually – to anyone who knows me, questioning how much time I put into what I do would be laughable. Brain Pickings is not how I make a living – it's MY LIFE, Felix. Every waking moment goes into it one way or another – the enormous amount of time it takes to read books, to research, to meet with people, to interview, and even to do this right now, and of course to write 3 articles a day Monday through Friday, between 300 and 3000 words each. (Add to that the time of my proofreader and any intern at any given time, plus designer and developer when needed.) And here's the thing – I do it not to "build an audience" or "generate revenue" or any of that, but because it gives me enormous joy and stimulation. It makes me excited to wake up and fulfilled to go to bed. And I guess what it boils down to is that the fraction of the world that's ever come across Brain Pickings and cares will just have to take my word for it. Those who don't are free to ask me questions, which I will always answer as honestly as I can and as completely as time permits, or they're free to move on. But Brain Pickings is my home – and people interested in hostile takedowns, like Tom seems to be, rather than in understanding what moves me or having an intelligent conversation about things, are simply not welcome in it.

Thanks for reading. Sorry this is so long.

// maria

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Reuters on the Road: Forget Silicon Valley, Britain is booming http://blogs.reuters.com/small-business/2013/02/11/reuters-on-the-road-forget-silicon-valley-britain-is-booming/ http://blogs.reuters.com/small-business/2013/02/11/reuters-on-the-road-forget-silicon-valley-britain-is-booming/#comments Mon, 11 Feb 2013 15:26:23 +0000 http://blogs.reuters.com/small-business/?p=6792 StartUp Britain’s Emma Jones takes the Reuters taxi challenge to tell us why almost half a million entrepreneurs think now is a great time to be starting a business in the UK.

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Amidst a banking dry spell, small businesses kickstart themselves http://blogs.reuters.com/edgy-optimist/2013/02/04/amidst-a-banking-dry-spell-small-businesses-kickstart-themselves/ http://blogs.reuters.com/edgy-optimist/2013/02/04/amidst-a-banking-dry-spell-small-businesses-kickstart-themselves/#comments Mon, 04 Feb 2013 18:45:17 +0000 http://blogs.reuters.com/edgy-optimist/?p=102 As the U.S. jobs market continues its slow, not-very-impressive-but-nonetheless-forward march, one area of the economy still lags. Banks have only very recently begun to lend. Both individuals and small businesses have faced tight credit standards enforced by risk-averse banks; mortgages have been hard to obtain, and small business credit has been tighter yet. From 2008 to 2011, loans to small businesses fell 20 percent. The net effect has been to mute an already muted recovery.

These trends haven’t been confined to the United States. Lending has been even tighter in Europe, particularly in stressed markets such as Spain. While there are some signs of a thaw, the days of easy credit spurring new and small entrepreneurs to create new and innovative companies seem increasingly of the past.

Or so the data points from the banking and credit industry tell us. What they don’t tell us is that as traditional sources of credit and funding have withered, alternate sources have blossomed. We have been so focused on the negative shifts triggered by the financial crisis of 2008-09 that we may have neglected to notice some new and powerfully positive trends.

Take the case of Kickstarter. It may be no coincidence that the site launched in April 2009, just as the global credit crunch was reaching its apex (or nadir, depending on your perspective). With the almost complete evaporation of traditional forms of financing, especially for high-risk entrepreneurial projects with shoot-for-the-moon ambition, Kickstarter took an entirely different approach: It used the Web to connect people with ideas to people with money. In Kickstarter’s case, however, the connection isn’t to people with lots of money ‑ it’s to anyone willing to put up a little bit for an idea that inspires, excites or intrigues.

Kickstarter is an exercise in what has been called “crowdfunding,” and its numbers are startling. According to its own published numbers, since the site launched less than four years ago, 3 million people have pledged more than $400 million to 35,000 different successful projects. The majority of them have raised $1,000 to $10,000, but more than 400 projects have raised $100,000 to $1 million. The most successful projects have been clustered in the arts (especially film), but the largest project is a smartphone watch called the Pebble E-Paper Watch that is expected to launch sometime this year; its creators raised more than $10 million in pledges made by almost 70,000 people. The launch has had several delays, but that has little to do with funding.

There is every reason to suppose that this model is in its infancy. With the passage of the JOBS Act last year, many of the restrictions on raising money to finance private projects could be lifted as early as this year, making it that much easier to advertise. There are also numerous other crowdfunding sites focused on donations and non-profit ventures, but the surge in Kickstarter speaks to a fact that is all but lost in the focus on dwindling lending by traditional banks: We live in a world awash in capital, much of it inexpensive because of low interest rates. Rather than funding flowing in large chunks from a small numbers of banks, it can now flow in small chunks from a vast number of small investors looking to be a part of the next new thing.

This democratization of finance could in time have as revolutionary an effect on traditional lending and banking as digital music has had on the traditional recording industry. It is the ultimate disruptive model, simultaneously opening doors and threatening established gatekeepers. While Kickstarter doesn’t yet challenge the mega-financing provided by investment banks to governments and multinational corporations, there are signs of cracks in that world as well, as large companies circumvent banks and market bonds directly to individual and institutional investors.

Take the recent example of Andrew Sullivan and his blog “The Daily Dish.” At the beginning of the year, Sullivan decided that rather than hosting it at The Daily Beast, he would create a company called Dish Publishing with a unique twist. Rather than relying on subscriptions (the old magazine model) or pay-walls (the new model for digital publications), he would simply ask those who valued the site’s content to pay $19.95 a year for total access in order to meet the company’s overhead; those who don’t subscribe can still access the site, but not all of it. In its first 24 hours, the site raised more than $300,000 from 11,000 people. When the site launch a few days ago, Sullivan claimed the site had raised half a million dollars.

For years the media have lamented that its revenues were eroding in the face of free content offered online. Print publications have been dying or shriveling, and online sites have been challenged to raise sufficient ad dollars to cover even a fraction of the overhead commanded by print. Content online may be easy to distribute relative to printed pages, but someone still has to generate it and publish it, and that requires money. Money has been in short-supply in the traditional media model, but Sullivan has shown with his elegantly simple experiment that when you stop banging your head against closed doors, you sometimes find that there’s an open door just a few steps away.

The scale of all these new channels is tiny compared with what is disappearing or being disrupted. Then again, the numbers of people contributing money isn’t small, and as broadband and computer literacy become even more widespread, the numbers could easily multiply.

These developments have occurred in a parallel and seemingly unconnected universe to that of traditional financing. Small business lending statistics take no account of Kickstarter and crowdfunding; Sullivan’s experiment with The Dish has so startled traditional media that people are only beginning to understand how potent, powerful and perfect a model it might be – that is, when people pay something for content they value because they understand that everything costs something.

Dysfunctional banks and a sluggish recovery are known quantities. The potential efflorescence of democratized financing for tens of thousands of ventures wasn’t much predicted, yet here it is. And if it gathers steam, it will undermine established channels, disrupt entrenched ways of doing businesses and unleash a wave of new businesses and new ideas that have only been lacking a kick start, and which the tired banks of the 20th century failed to see as a great untapped well of possibility.

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